Source - RNS
RNS Number : 7517J
Epwin Group PLC
14 September 2016
 



 

 

 

14 September 2016

 

This announcement contains inside information

 

Epwin Group Plc

 

Half year results for the six months to 30 June 2016

 

Continued strategic progress

 

Epwin Group Plc (AIM: EPWN) ("Epwin" or the "Group"), the vertically integrated manufacturer of low maintenance building products, supplying the Repair, Maintenance and Improvement ("RMI"), new build and social housing sectors, announces its half year results for the six months to 30 June 2016.

 

Financial highlights

£m

 

H1 2016

 

H1 2015

 

Change

Revenue

143.3

124.1

+15.5%

Underlying operating profit 1

11.8

8.0

+47.5%

Underlying operating profit margin 1

8.2%

6.4%

+180bps

Profit before tax

Basic EPS

10.4

6.08p

7.6

4.59p

+36.8%

+32.5%

Dividend per share

2.20p

2.12p

+3.8%

Net cash / (debt)

(29.9)

(2.2)

 

Operating cash conversion 2

79.7%

78.8%

 

         

 

Financial headlines

·     Revenues up 16% and underlying operating profit up 48%

·     Good contribution to half year performance from businesses acquired in 2015

·     Continued margin improvement: operating margins up 180bps

·     Resilient underlying performance in challenging conditions

·     Strong cash performance and balance sheet supports investment in products and acquisitions

·     3.8% increase in interim dividend

 

Continued progress with strategy

·     Investment in new products to drive long term market share gain

·     Acquisition of National Plastics, broadening our plastics distribution channel and national reach for our growing product portfolio

·     Stormking and Ecodek acquisitions integrating well and performing in line with our expectations

·     Continuing strong performance in Extrusion and Moulding, like for like revenues up 5%

·     Actions underway to improve Fabrication and Distribution performance

 

Jon Bednall, Chief Executive Officer, said:

 

"We made good progress in the first half of 2016, both with our performance and our strategy.  This is reflected in the increase in revenues and profits in the first half, at improved margins.

 

"We have continued to broaden our product portfolio and channels to market, and drive operational efficiency.  We completed one acquisition in the first half, following two acquisitions in 2015; they are integrating well.  Whilst the impact of the EU referendum is unclear, the board is confident in the long term fundamentals of the Group and the market and expects to make further progress in the remainder of 2016."

 

Enquiries:

 

Epwin Group Plc                                                              +44 (0) 203 128 8100

Jon Bednall, Chief Executive

Chris Empson, Group Finance Director

 

Zeus Capital Limited (Nomad and Broker)                                           

Nick Cowles / Andrew Jones / Jamie Peel                   +44 (0) 161 831 1512       

John Goold / Dominic King                                             +44 (0) 203 829 5000

 

MHP Communications                                                   +44 (0) 203 128 8100

Jamie Ricketts / Rossina Garcia

 

 (1) Underlying operating profit and margin is operating profit before amortisation of acquired intangible fixed assets, acquisition expenses and share-based payments.

(2) Operating cash conversion is pre-tax operating cash flow as a percentage of underlying operating profit.

 

Forthcoming dates:

Ex-dividend date                            22 September 2016

Dividend record date                    23 September 2016

Dividend payment date                21 October 2016

 

About Epwin

Epwin is a vertically integrated manufacturer of low maintenance building products, supplying the RMI, new build and social housing sectors.

The Company is incorporated, domiciled and operates principally in the United Kingdom.

www.epwin.co.uk

Group Business Review

Epwin delivered an increase in revenue and profit in the first half, with headline revenues and operating profit up 16% and 48% respectively. 

On a like for like basis, revenue and underlying operating profit were marginally higher than the prior period, a resilient performance in challenging market conditions.  Like for like revenues were flat at £124.9 million (2015: £124.1 million) and underlying operating profit was marginally ahead at £8.1 million (2015: £8.0 million). 

We invested further in new products in the first half, notably through the launch of a new market leading window system, "Optima".  We are pleased to report that the new system has been very well received by both our existing fabricator customer base and within the wider market and the roll out is progressing to plan.

We continue to make good progress with our strategy to broaden our product range, technical capability and channels to market.  The integration of Stormking and Ecodek (both acquired in late 2015) is progressing well, with both businesses performing in line with expectations.  Stormking is a market leader in pre-fabricated Glass Reinforced Plastic ("GRP") building components predominantly serving the new build market, and Ecodek is a leading manufacturer of Wood Plastic Composite which is a 90% recycled hardwood substitute for balconies and decking.  In the period to 30 June 2016 we acquired Specialist Plastics Distribution Limited ("SPD") and its subsidiaries, a national distributor of building plastics to the trade that operates principally under the 'National Plastics' brand.  This acquisition will add scale to our existing distribution operations and provide a further route to market for the Group's growing product portfolio.  Together the acquisitions contributed £18.4 million of revenue and £3.7 million of underlying operating profit during the first six months. 

Overall, market conditions in the first six months of the year were consistent with 2015.  Whilst the impact of the EU referendum is unclear, we noted a dip in the market before and after the vote. 

Results

 

 

 

 

 

6 months ended

6 months ended

Key financials

 

 

 

30 June 2016

£'million

30 June 2015

£'million

Revenue (excluding discontinued and disposed businesses)

 

 

 

143.3

124.1

 

 

 

 

 

 

Underlying operating profit (*)

 

 

11.8

8.0

Amortisation of acquired intangible fixed assets

 

 

(0.5)

-

Acquisition expenses

 

 

(0.2)

-

Share based payments

 

 

(0.2)

(0.2)

 

Operating profit

 

 

 

10.9

7.8

Underlying operating profit margin (*)

 

 

 

8.2%

6.4%

Operating profit margin

 

7.6%

6.3%

 

(*) Underlying operating profit and margin is operating profit before amortisation of acquired intangible fixed assets, acquisition expenses and share-based payments.

Extrusion and Moulding continues to perform well, with like for like revenues increasing by 5% to £73.6 million and like for like underlying operating profit increasing 11% to £8.0 million.

 

Fabrication and Distribution continues to be an area of focus, with actions underway to improve performance.  Further changes were made during the first half to strengthen the senior management team and improve operations.  Revenues were behind the first half of 2015 with the continued fluctuating demand patterns that affected H2 2015 impacting on operational efficiency.  Like for like revenues for the first half were down 5% to £51.3 million, with underlying operating profit lower at £1.0 million (2015 £1.6 million).

 

 

Cash flow

 

 

 

 

 

6 months ended

6 months ended

 

 

 

 

30 June 2016

£'million

30 June 2015

£'million

Pre-tax operating cash flow

 

 

 

9.4

6.3

 

 

 

 

 

 

Tax paid

 

 

 

(1.2)

(1.4)

Acquisitions

 

 

 

(8.7)

-

Acquisition of intangible fixed assets

 

 

 

(0.6)

-

Capital expenditure

 

 

 

(7.7)

(4.2)

Net interest paid

 

 

 

(0.5)

(0.2)

Repayment of borrowings

 

 

 

(5.0)

-

Finance lease repayments

 

 

 

(0.4)

(0.3)

Dividends

 

 

 

(6.0)

(3.8)

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

 

(20.7)

(3.6)

 

 

 

 

Net debt

 

29.9

2.2

 

Pre-tax operating cash inflow improved to £9.4 million (2015: £6.3 million), mainly as a result of the contribution of the acquisitions made in the final quarter of 2015. Pre-tax operating cash conversion was broadly in line with the prior half year at 80%.  At 30 June 2016 the Group had net debt of £29.9 million (31 December 2015 £14.4 million net debt, 30 June 2015 £2.2 million net debt) as a consequence of the initial net cash consideration of £8.7 million for the acquisition of National Plastics and the capital investment related to the development and launch of the Group's new window system, Optima.

 

Dividend

 

The Board is pleased to announce an interim dividend of 2.20 pence per ordinary share (2015: 2.12 pence) in line with market expectations.  This will be paid on 21 October 2016 to shareholders on the register on 23 September 2016.

 

Outlook

As previously reported, the Group's strategy is focused on extending our product portfolio, technical capability and channels to market, both through investment in new products and acquisitions; operational improvement; cross-selling across our customer base; and leveraging the recognition and channels of our brands for the benefit of the Group.  We remain confident of our ability to progress these areas even in challenging market conditions. The long-term drivers of the RMI market remain positive. 

There continues to be significant underinvestment by property owners in the repair and maintenance of the UK's housing stock and 77% of the UK housing stock was built before 1980. 

Within the fenestration industry, figures indicate that around 4.3 million window frames are replaced each year, representing a replacement rate of less than 2% per annum. The Group believes that a replacement rate significantly above this is required to address the ageing population of fenestration products and, due to the recent and continuing history of underinvestment in UK housing stock, there is significant pent up demand within the RMI space.

Similar dynamics are true for the cellular roofline business, which has demonstrated growth, and further opportunities are believed to exist to grow given that it is estimated that cellular roofline is only 50% penetrated into the residential property market, with the balance still being largely timber.

The outlook for the markets we have entered via recent acquisitions is positive.  The Wood Plastic Composite decking market is relatively new in the UK and we believe will demonstrate good growth.  The Glass Reinforced Plastic moulding market, whilst being more mature, has also grown impressively as new housebuilders in particular look to improve efficiency via off-site manufacture and offers further opportunities in the trade and social sectors over time.

Whilst the impact of the EU referendum is unclear and market conditions remain challenging, the board is confident in the long term fundamentals of the Group and the markets in which it operates.

Divisional Business Review

 

The Group operates in the market through a number of brands, reported through two segments:

 

·     Extrusion and Moulding

Manufactures and markets the following products:

•     Leading brands of PVC-UE extruded 'cellular' roofline and cladding profile systems for the replacement and installation of soffits, barge boards, cladding and window trims.  Epwin is the market leader extruding c.30,000 tonnes per annum.

•     Complete extruded PVC-U window profile systems for fabricators of windows, doors, cavity closers and curtain walling.  c.35,000 tonnes of profile are manufactured per annum, making Epwin one of the leading UK manufacturers.

•     Complementary range of PVC-U rainwater and drainage products. A relatively new development in the Group with considerable scope for volume and market share growth.

•     Moulded Glass Reinforced Plastic ("GRP") building components to the housebuilding industry in the UK.  The product range includes porches, dormers, chimneys, bay window roofs, entrance canopies, copings and other bespoke components.

•     Wood Plastic Composite ("WPC") products, the current primary application being a hardwood substitute for balconies and outdoor decking.

•     The business operates from extrusion and moulding facilities in Telford, Tamworth, Macclesfield, Wrexham and Scunthorpe.
 

·     Fabrication and Distribution

Services the specialist requirements of social, new build and the trade market sectors with fabricated windows and doors from the Group's own profile systems and the distribution of these and the Group's other products. Added value services include bespoke design, scheduling, plot invoicing and installation.

•     Manufactures in excess of 300,000 frames per year and more than 30,000 GRP and Thermoplastic door sets and c.1.3 million glass sealed units.

•     Operates from five window and door fabrication sites and two glass sealed unit manufacturing sites in Paignton, Telford, Cardiff, Upton-upon-Severn, Northampton and Newton Abbot.

•     Operates a chain of building plastic trade distribution centres and a chain of Window Stores to service local demand for the Group's manufactured products from the trade sector.

•     Added further distribution centres for building plastic and fenestration products with the acquisition of National Plastics in June 2016.

Segmental Results

 

6 months ended

6 months ended

 

30 June 2016

30 June 2016

 

£'million

£'million

Revenue (excluding discontinued and disposed business)

 

 

Extrusion & Moulding

90.5

69.9

Fabrication & Distribution

52.8

54.2

Total

143.3

124.1

 

 

 

Underlying segmental operating profit

 

 

Extrusion

11.6

7.2

Fabrication & Distribution

1.1

1.6

Underlying segmental operating profit before corporate and other costs

12.7

8.8

Corporate and other costs

(0.9)

(0.8)

Underlying operating profit (*)

11.8

8.0

Amortisation of acquired intangible fixed assets

(0.5)

-

Acquisition expenses

(0.2)

-

Share based payments

(0.2)

(0.2)

Operating profit

10.9

7.8

 

(*) Underlying operating profit and margin is operating profit before amortisation of acquired intangible fixed assets, acquisition expenses and share-based payments.

 

Extrusion and Moulding

 

·    Revenue increased 29% to £90.5 million (2015: £69.9 million) and underlying operating profit increased 61% to £11.6 million (2015: £7.2 million) primarily as a result of acquisitions and increasing volumes.

 

 

·    The Group launched its new, market leading window profile system at the end of Q1 2016, which has been well received by both our existing fabricator customer base and within the wider market and the roll out is progressing to plan.

 

·    The rainwater and drainage business continues to perform well and is 10% up on prior year as the investment made by the Group in this area is coming to fruition. 

 

Fabrication and Distribution

 

·    Revenue of £52.8 million (2015: £54.2 million) reflecting the soft market conditions as well as operational and commercial challenges within the business.

 

·    Towards the end of the second quarter, demand for fabricated windows decreased, we believe due to the uncertainty generated by the UK referendum on membership of the EU and subsequent vote to leave.  The social housing market also slowed in the first half against 2015 with social housing starts down around 20% year on year.

 

·    Operating profit of £1.1 million, compared to £1.6 million for the same period in 2015, is lower due to the continued impact of lower and fluctuating sales volumes for fabricated products and the consequent operational efficiencies that arise.   Market demand continues to be erratic, the Fenestration Self-Assessment Scheme (FENSA) statistics for the 6 months to June show an overall fall in certified installations of 2% against H1 2015. 

 

Action plans are in place to address these matters and are being further considered following the referendum decision on EU membership.

 

·    The door business, which was disrupted by the site consolidation in 2015, has shown improved performance in H1 2016.

 

 

 

 

 

Condensed Consolidated Income Statement

 

 

 

 

for the six months ended 30 June 2016

 

 

 

 

 

 

 

 

 

 

 

6 month ended

 30 June 2016

6 months ended

 30 June 2015

Year ended 31 December

2015

 

 

(unaudited)

(unaudited)

(audited)

 

Note

£'million

£'million

£'million

Group revenue

2

143.3

124.1

256.0

Cost of sales

 

(99.9)

(88.3)

(178.6)

Gross profit

 

43.4

35.8

77.4

Distribution expenses

 

(13.4)

(11.8)

(24.3)

Administrative expenses

 

(19.1)

(16.2)

(34.0)

 

 

 

 

 

Underlying operating profit

3

11.8

8.0

20.1

Amortisation of acquired intangible assets

 

(0.5)

-

-

Acquisition expenses

 

(0.2)

-

(0.6)

Share based payments

 

(0.2)

(0.2)

(0.4)

 

 

 

 

 

Operating profit

 

10.9

7.8

19.1

Net finance costs

 

(0.5)

(0.2)

(0.5)

Profit before tax

 

10.4

7.6

18.6

Taxation

5

(1.8)

(1.4)

(3.3)

Profit for the period and total comprehensive income

 

8.6

6.2

15.3

 

 

 

 

 

Basic earnings per share

 

Pence

pence

Pence

Earnings per share

6

6.08

4.59

11.32

 

 

 

 

 

Diluted earnings per share

 

 

 

 

Earnings per share

6

6.02

4.56

11.23

 

 

 

   

Condensed Consolidated Balance Sheet

as at 30 June 2016

 

 

 

 

 

 

    30 June 2016

30 June 2015

31 December 2015

 

 

(unaudited)

(unaudited)

(audited)

 

Note

£'million

£'million

£'million

Assets

 

 

 

 

Non-current assets

 

 

 

 

Goodwill

 

63.9

24.5

54.3

Other intangible assets

 

4.7

0.2

3.6

Property, plant and equipment

 

38.0

27.6

33.1

Deferred tax asset

 

0.4

2.9

0.7

 

 

107.0

55.2

91.7

Current assets

 

 

 

 

Inventories

 

26.9

23.6

23.6

Trade and other receivables

 

49.4

43.6

41.5

Cash and cash equivalents

8

1.4

-

22.1

 

 

77.7

67.2

87.2

Total assets

 

184.7

122.4

178.9

 

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Bank overdraft

8

-

1.3

-

Other interest bearing loans and borrowings

8

10.7

0.4

15.6

Trade and other payables

 

57.2

48.5

50.0

Tax payable

 

3.3

2.0

2.6

Provisions

 

0.7

0.9

0.6

 

 

71.9

53.1

68.8

Non-current liabilities

 

 

 

 

Other interest bearing loans and borrowings

8

20.6

0.5

20.9

Contingent consideration

 

5.5

-

5.5

Provisions

 

3.8

3.4

3.6

 

 

29.9

3.9

30.0

Total liabilities

 

101.8

57.0

98.8

 

 

 

 

 

Net assets

 

82.9

65.4

80.1

 

 

 

 

 

Equity

 

 

 

 

Ordinary share capital

 

0.1

0.1

0.1

Share premium

 

12.5

12.5

12.5

Merger reserve

 

23.9

15.6

23.9

Retained earnings

 

46.4

37.2

43.6

Total equity

 

82.9

65.4

80.1

 

 

 

 

Condensed Consolidated Statement of Changes in Equity

 

 

 

 

for the six months ended 30 June 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

6 months ended

 30 June 2016

6 months ended

 30 June 2015

Year ended

31 December 2015

 

 

(unaudited)

(unaudited)

(audited)

 

 

£'million

£'million

£'million

Balance at the start of the period

 

80.1

62.8

62.8

Profit for the period

 

8.6

6.2

15.3

Issue of shares

 

-

-

8.3

Share-based payments

 

0.2

0.2

0.4

Dividends

7

(6.0)

(3.8)

(6.7)

Balance at the end of the period

 

82.9

65.4

80.1

 

 

Consolidated Cash Flow Statement

for the six months ended 30 June 2016

 

 

 

6 months ended

30 June 2016

6 months ended

30 June 2015

Year ended

31 December 2015

 

 

(unaudited)

(unaudited)

(audited)

 

 Note

£'million

£'million

£'million

Cash flows from operating activities

 

 

 

 

Profit for the period

 

8.6

6.2

15.3

Adjustments for:

 

 

 

 

Depreciation and amortisation

 

4.1

2.8

5.5

Net finance costs

 

0.5

0.2

0.5

Taxation

 

1.8

1.4

3.3

Share-based payments

 

0.2

0.2

0.4

 

 

15.2

10.8

25.0

(Increase) in inventories

 

(1.1)

(1.2)

0.1

(Increase)/decrease in trade and other receivables

 

(6.7)

(6.0)

0.3

Increase/(decrease) in trade and other payables

 

2.0

2.9

(1.1)

(Decrease) in provisions

 

-

(0.2)

(0.5)

 

 

9.4

6.3

23.8

Tax paid

 

(1.2)

(1.4)

(2.3)

Net cash from operating activities

 

8.2

4.9

21.5

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Acquisition of subsidiary, net of cash acquired

 

(8.7)

-

(20.9)

Acquisition of intangible fixed assets

 

(0.6)

-

-

Acquisition of property, plant and equipment

 

(7.7)

(4.2)

(9.0)

Net cash from investing activities

 

(17.0)

(4.2)

(29.9)

 

Cash flows from financing activities

 

 

 

 

Net interest paid

 

(0.5)

(0.2)

(0.5)

(Repayment) / drawdown  of borrowings

 

(5.0)

-

35.0

Capital element of finance lease repayments

 

(0.4)

(0.3)

0.4

Dividends paid

7

(6.0)

(3.8)

(6.7)

Net cash from financing activities

 

(11.9)

(4.3)

28.2

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(20.7)

(3.6)

19.8

Cash and cash equivalents at the beginning of period

 

22.1

2.3

2.3

Cash and cash equivalents at end of period

 

1.4

(1.3)

22.1

Bank Borrowings

 

(29.7)

-

(34.7)

Finance lease liabilities

(1.6)

(0.9)

(1.8)

Net debt

8

(29.9)

(2.2)

(14.4)

 

 

 

Notes to the Condensed Consolidated Financial Statements

for the six months ended 30 June 2016

1.   Basis of preparation

These financial statements have been prepared on the basis of the accounting policies expected to be adopted for the year ended 31 December 2016.  These are in accordance with the Group's accounting policies as set out in the Group's consolidated financial statements for the year ended 31 December 2015.

 

The recognition and measurement requirements of all International Financial Reporting Standards ('IFRSs'), International Accounting Standards ('IAS') and interpretations currently endorsed by the International Accounting Standards Board ('IASB') and its committees as adopted by the EU and as required to be adopted by AIM listed companies have been applied.  AIM-listed companies are not required to comply with IAS 34 'Interim Financial Reporting' and accordingly the Company has taken advantage of this exemption.

 

On the basis of current financial projections and facilities available, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and, accordingly, consider that it is appropriate to adopt the going concern basis in preparing these Interim Financial Statements.

 

The financial information in these financial statements does not constitute statutory accounts for the six months ended 30 June 2016 and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2015 which were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain statements under sections 498(2) and (3) Companies Act 2006.

 

The condensed consolidated financial statements for the six months to 30 June 2016 have not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

 

The condensed consolidated financial statements were approved by the Board of Directors on 13 September 2016.

 

 

2.   Segmental reporting

Segmental information is presented in respect of the Group's reportable operating segments in line with IFRS 8 'Operating Segments', which requires segmental information to be disclosed on the same basis as it is viewed internally by the Chief Operating Decision Maker.

 

Reportable segments                    Operations

 

Extrusion and Moulding               Extrusion and marketing of PVC-U window profile systems, PVC-UE cellular roofline and cladding, rigid rainwater and drainage products and Wood Plastic Composite ("WPC") decking products. Moulding of Glass Reinforced Plastic ("GRP") building components.

 

Fabrication and Distribution       Fabrication and marketing of windows and doors, distribution of cellular roofline, cladding, rainwater and drainage products, and manufacture of glass sealed units.

 

 

 

 

 

6 months ended

 30 June

2016

6 months ended

 30 June 2015

Year ended

 31 December

2015

 

 

(unaudited)

(unaudited)

(audited)

 

 

£'million

£'million

£'million

Revenue from external customers

 

 

 

 

Extrusion & Moulding

 

90.5

69.9

146.6

Fabrication & Distribution

 

52.8

54.2

109.4

Total

 

143.3

124.1

256.0

 

Segmental operating profit

 

 

 

 

Extrusion & Moulding

 

11.6

7.2

17.7

Fabrication & Distribution

 

1.1

1.6

4.2

Segmental operating profit before corporate and other costs 

 

12.7

8.8

21.9

Corporate and other costs

 

(0.9)

(0.8)

 (1.8)

Underlying operating profit

 

11.8

8.0

20.1

Amortisation of acquired intangible fixed assets

 

(0.5)

-

-

Acquisition expenses

 

(0.2)

-

(0.6)

Share based payments

 

(0.2)

(0.2)

(0.4)

Group operating profit

 

10.9

7.8

19.1

Net finance costs

 

(0.5)

(0.2)

(0.5)

Profit before tax

 

10.4

7.6

18.6

 
3.   Underlying operating profit

'Underlying operating profit' is the key profit measure used by the Board to assess the underlying financial performance of the operating divisions and the Group as a whole. 'Underlying operating profit' is operating profit stated before amortisation or impairment of acquired intangible assets, business reorganisation costs, acquisition expenses and share based payments.

 

4.   Acquisitions

 

 

 

Provisional fair values on acquisition

Recognised amounts of identifiable assets acquired and liabilities: assumed:

 

 

£m

Acquired intangibles - brand

 

 

1.0

Property, plant and equipment

 

 

0.8

Inventories

 

 

2.2

Trade and other receivables

 

 

1.2

Cash and cash equivalent

 

 

-

Other interest bearing loans and borrowings

 

 

(0.2)

Trade and other payables

 

 

(3.9)

Income tax payable

 

 

(0.1)

Dilapidations provision

 

 

(0.3)

Deferred tax liability

 

 

(0.3)

Fair value of assets acquired

 

 

0.4 

Goodwill

 

 

9.6

Total Consideration

 

 

10.0

 

 

 

 

On 10 June 2016 the Group completed the acquisition of the entire share capital of Specialist Plastics Distribution Limited and subsidiaries (trading as "National Plastics") for net cash consideration in the period of £8.7 million and a total consideration of £10.0 million cash payable in the current year.

 

National Plastics operates a chain of plastics distribution outlets across the UK.

 

On acquisition an intangible fixed asset representing the National Plastics brand of £1.0 million was recognised. The goodwill of £9.6 million recognised on the acquisition of National Plastics represents the collective local knowledge of the workforce, plus the potential for cross-selling and synergies that exist as a result of the larger scale of the Epwin Group.

 

5.   Taxation

The tax charge for the six months to 30 June 2016 is based on the estimated tax rate for continuing operations for the full year.

 

The main rate of corporation tax was lowered from 21% to 20% with effect from 1 April 2015. Further reductions to 19% from 1 April 2017 and to 18% from 1 April 2020 were enacted during 2016. In the March 2016 Budget, it was announced that the reduction from 1 April 2020 will be to 17% (instead of 18%) and it is anticipated that this will be enacted during 2016. This will reduce the Company's future current tax charge accordingly. The deferred tax assets at 30 June 2016 have been calculated based on the rate of 19% substantively enacted at the balance sheet date.

 

6.   Earnings per share (EPS)

 

6 months ended

30 June 2016

6 months ended

30 June 2015

Year ended

31 December 2015

 

£'million

£'million

£'million

Profit for the period, being basic earnings attributable to ordinary equity shareholders

8.6

6.2

15.3

 

 

 

pence

pence

pence

Basic EPS

 

 

 

Basic earnings per share

6.08

4.59

11.32

         

 

 

 

Pence

pence

pence

Diluted EPS

 

 

 

Diluted earnings per share

6.02

4.56

11.23

         

 

 

 

 

 

 

 

Number of shares

 

No.

No.

No.

Weighted average number of shares used to calculate earnings per share

 

 

 

 

-       Basic

 

141,515,621

135,000,000

135,198,199

-       Diluted

 

142,815,705

135,945,811

136,259,577

 

 

7.   Dividends

 

6 months ended 30 June 2016

6 months ended 30 June 2015

Year ended 31 December 2015

 

£'million

£'million

£'million

2014 final dividend of 2.83 pence per share

-

3.8

3.8

2015 interim dividend of 2.12 pence per share

-

-

2.9

2015 final dividend of 4.25 pence per share

6.0

-

-

 

6.0

3.8

6.7

 

The Group will pay an interim dividend of 2.20 pence per Ordinary Share in respect of the six months to 30 June 2016 (30 June 2015: 2.12 pence) on 21 October 2016 to shareholders on the register on 23 September 2016.

 

8.   Net debt

 

 

6 months ended

30 June 2016

6 months ended

30 June 2015

Year ended

31 December 2015

 

 

(unaudited)

(unaudited)

(audited)

 

 

£'million

£'million

£'million

Cash and cash equivalents

 

1.4

(1.3)

22.1

Bank Borrowings

 

(29.7)

-

(34.7)

Finance lease liabilities

 

(1.6)

(0.9)

(1.8)

Net debt

 

(29.9)

(2.2)

(14.4)

 

The facilities available to the Group at 30 June 2016 were a £20.0 million term loan, £35.0 million Revolving Credit Facility and £5.0 million overdraft, secured on the assets of the Group.  The term of the loan and revolving credit facility is for four years ending December 2019.

 

9.   Cautionary statement

This document contains certain forward-looking statements with respect of the financial condition, results, operations and businesses of Epwin Group Plc. Whilst these statements are made in good faith based on information available at the time of approval, these statements and forecasts inherently involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause the actual result or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. Nothing in this document should be construed as a profit forecast.

 

10.  Copies of this half year report

Further copies of this half year report are available from the registered office: Epwin Group Plc, 1b Stratford Court, Cranmore Boulevard, Solihull, B90 4QT or on the Company's website www.epwin.co.uk


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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